U.S. home builder confidence remains firm in November, housing market to record modest gains in year ahead

U.S. builder confidence for newly-built single-family homes remained firm in November. The NAHB/Wells Fargo Housing Market Index stayed unchanged at 63 in the month, consistent with expectations. The Midwest, Northeast and West recorded slight gains, whereas builder sentiment remained stable in the South.

NAHB Chairman Ed Brady stated that builder sentiment has remained well above 60 in the past three months, suggesting that the single-family housing sector continues to show slow and gradual growth. Meanwhile, NAHB Chief Economist Robert Dietz said that rising incomes, ongoing job creation and attractive mortgage rates are underpinning demand in the single-family housing sector. This is expected to keep housing on a stable, upward path in the coming months, added Dietz.

Modest rebound in prospective buyers’ traffic countered a two point dip in expectations for future single-family home sales, whereas the present sales gauge remained the same. Region wise, home builders reported a slight rise in all areas, expect for the South, which recorded no change.

The builder sentiment index currently stands two points above its six-month average and continues to be at a level in line with moderate gains in home sales. Buyers seem to be stalling at higher priced homes, resulting in builders to adjust their product mix, noted Wells Fargo.

“We continue to look for modest gains in the housing market in the year ahead, as higher home prices, low inventories and rising mortgage rates restrain affordability”, added Wells Fargo.

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